The Department of Work and Pensions has caused confusion about the value of retirement pots and the age at which payments will begin, said MPs.
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Major changes to the state pension that are days away have been so poorly communicated to the public that even those who will end up better off may not know it, according to a select committee report.

The government has failed to explain the complexities of the new state pension, which will come into effect from 6 April, according to the House of Commons work and pensions select committee in a report released on Sunday. This has resulted in many people – even those set to benefit from the changes – being left confused about what the effects will be.

The new state pension will replace what the Department of Work and Pensions (DWP) has called a “mindblowingly complicated” existing system. Those reaching state pension age on or after 6 April 2016 will get the new regular payment, which has been set at £155.65 a week. Although aims to simplify the system have been welcomed, concerns have been raised that poor communication has led to confusion about the value of retirement pots and the age at which payments will begin.

The report says the impacts on different groups – among them people with less than 10 years of contributions and some women – have been poorly communicated and oversimplified. As a result, many people believe they will get the flat rate of £155.65 a week when in fact the majority will not in the first year.

“Over time, more and more pensioners will receive a single flat rate. During transition however, the majority will not. This has not been made sufficiently clear in government communications that have focused on the full flat rate of £155.65, contributing to confusion about the new system,” the report says.

In January, the committee warned the new system was widely misunderstood and called for urgent changes to be made to the information provided.

In today’s report, the committee calls on the DWP to contact those who are expected to receive less in the early years of the new state pension than previously or have gaps in their contribution record and set out the ways of improving their situation.

“There is no way that communicating changes which affect different groups very differently, over different timelines, should ever have been left to general awareness campaigns or happenchance. The oversimplified message about the flat-rate amount has left many people unprepared and confused,” the committee chair, Frank Field, said.

Kate Smith, the head of pensions at Aegon UK, called for the government to issue statements setting out what people will be entitled to. “Effectively there’s a new state pension age every month for women as it gradually equalises at age 65 for men and women in 2018, then moves to age 66 by 2020, and many people won’t realise this. In addition, most people don’t know how much new state pension they will get, particularly given complicated transition arrangements to the new flat rate pension,” she said.

A statement from the DWP said it was committed to making sure the public fully understand the changes and that a multimedia campaign launched in 2014 would continue for the coming years. It said the department would respond to the committee recommendations “in due course”.